It's an honor to stand before you in this majestic chamber, the seat of New York's democracy. Each of us has taken a solemn oath to uphold this democracy and has the privilege of serving the most courageous people and the greatest state in the nation.

It's exciting to be here today to deliver my 10th State of the State address. For those of you who have sat through the previous 9 hours and 46 minutes of my State of the State speeches, you know they tend to be long. I just want to make sure everyone is comfortable in their seats - Eliot, Alan, Senator Balboni, Secretary Daniels - is everyone comfortable? Because I may be here longer than you think.

We're joined by a great New Yorker and good friend who addressed the opening session of the Legislature eight times as New York's Governor. Governor Carey, on behalf of everyone in this chamber, I want to thank you for being here today as we work to build on your proud legacy.

Libby, Mom, Allison, thank you for being here with me today and everyday.

As we look towards a new year with hope, let us remember the good friends we lost this past year.

The Catskills couldn't have had a more dedicated public servant than Assemblyman Jake Gunther. He was a friend and trusted colleague to us all, and he will be sorely missed. His widow, Aileen, is Jake's successor. Aileen, I want you to know that we all share your loss.

Just last week, we were all shocked to hear that Dick Miller passed away. Dick was loved in Binghamton, and here in Albany. We'll miss him dearly.

And all of us who work in the Capitol will never forget Trooper Bill Dooley. He was, quite simply, everyone's friend - a wonderful, funny, intelligent, outgoing man whose presence in our Capitol made us proud.

Let us bow our heads for a moment of silence in memory of these three friends and great public servants.

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Let us also remember the brave New Yorkers who made the supreme sacrifice for their nation and its people this past year:

The police officers and firefighters who laid down their lives to protect New Yorkers from harm...

And the soldiers, sailors, airmen and marines we lost in the fight for freedom abroad...

We owe them and their families a debt of gratitude that can never fully be repaid.

These brave men and women fought and died for the source of our unity, the bedrock of our democracy and the promise of our future. They fought and died for our freedom.

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Today, with our nation engaged in a War on Terror, both here at home and abroad, it is appropriate that we reflect on that concept of freedom.

Like all of you, I learned about freedom from my parents and teachers. But I also watched it unfold from a farmhouse in Peekskill. For it was there that I sat with my grandparents watching as the streets of their native Hungary blazed with revolution. On that day, my father told me freedom was worth dying for.

Later, we would witness and become part of a new fight for freedom. Only this battle wasn't being fought in a far away country accessible only by television. No, this battle was being waged right here on the streets of New York, and not by brave strangers but by our own friends and neighbors.

Today's children - our children and grandchildren - are part of a new era of freedom. Years from now, they will mark September 11, 2001 as a turning point for humankind - a date when those who believe in fear were overcome by those who believe in freedom.

One of those children -- nine-year-old Jessica Hefferon of Appleton in Niagara County -- understands these lessons well. Jessica wrote the winning essay for a national contest of the Weekly Reader. "Freedom," she wrote, "is great to have, so I think we should try and share it with people who don't have the freedom that we have in our country."

That is, of course, what America has always sought to do - bring the blessings of freedom to oppressed people throughout the world.

She went on to write that "Being free means that you can make your own choices in life." Her words remind us that freedom is ultimately a simple principle, one that we sometimes take for granted. They remind us, also, of our solemn obligation to enhance these precious freedoms...

The freedom to live in safety and security...

The freedom to find a good job and build a strong family...

The freedom to live, breathe and dream in a clean and healthy environment...

The freedom that comes with knowledge and a quality education...

...And the freedom to persevere over adversity.

Today, I will ask you to join me in setting ambitious goals for New York's future that strengthen these freedoms. And if they sound too ambitious, remember that in each case, we've done it before, which means we can do it again.

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Together, we've led the nation in fighting crime, and today New York is the safest large state in America. Let's pledge action so that in five years we will be the safest of any state in America. Today, I will outline a series of administrative and legislative actions to meet that goal.

Together, we helped create almost 500,000 new jobs since 1995. Let's work together to create one million new jobs by the end of this decade. Today, I will outline a detailed economic plan, which includes Phase II of our nationally-recognized high tech efforts, that will help to get us there.

Together, we've led the nation in our commitment to clean air and water. Let's be the nation's leader in clean and renewable energy technologies, and preserving open space. Today, I will advance a new environmental agenda to achieve both of these goals.

Together, we've made record investments in education. Let's work together and seize an historic opportunity to reform our education system so it's the best in the nation. Today, I will outline the guiding principles to lead us there.

And together, we can pay further tribute to those we lost on one of the darkest days in our nation's history. Today, I will update our timeline for revitalizing Lower Manhattan so that the heroes we lost are never forgotten.

To achieve these bold initiatives and new goals, I will ask you to join me in taking action on the 45 specific measures I outline today - some new, others long overdue - that will allow us to build upon our past success and ensure that New York is not only the world's greatest symbol of freedom - but its greatest example.

It is an aggressive, detailed and bold agenda that will require each of us to cast aside the petty divisions that often distract us from realizing our goals.

We've done it before. We can do it again.

And in doing so, we will pay tribute to the principle that unites each and every New Yorker - our deep and unequivocal love of freedom...

...the freedom Jessica so ably described in her essay.

Jessica is joined by her little brother Brian, her Mom, Tobi and her Dad, Major Steve Hefferon, a Squadron Commander in New York's Air National Guard...

Major, thank you for your service -- and Jessica thank you for your beautiful words, and for being here.

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We owe a tremendous debt of gratitude to Steve and all of the men and women of New York's National Guard.

I have regularly called upon the Guard over the past nine years in times of crisis - the attack on the World Trade Center... eight natural disasters... four plane crashes... eleven crippling blizzards... two major wildfires, a statewide blackout... and now of course... the threat of global terror.

In each case, the Guard responded quickly and heroically, and they've met every mission asked of them to protect our State and our nation.

And today, 3,400 guardsmen are serving across the globe, from Iraq and Afghanistan to the Canadian border and Grand Central Station.

The New York Air National Guard's 106th Rescue Wing, based in Westhampton, Long Island, has just returned from deployment in Iraq.

Most of us sadly recall hearing the news on November 2nd that a U.S. Army Chinook helicopter had been shot down outside the city of Falluja in Iraq, killing 16 soldiers.

On that tragic day, members of the 106th proved why they are considered among the very best at what they do.

Within minutes, helicopter crews from the 106th arrived at the site and rescued survivors from the smoldering wreckage.

Four of the heroes who took part in that rescue are here today. Your actions are a great credit to our country, and a great source of pride to the people of New York State.

The Guard's support for New Yorkers is strong and unconditional. Our support for them must be the same. Last year, we passed the Patriot Plan -- the most comprehensive package of new benefits and protections in the nation to support New York's citizen soldiers and their families when they are called to active duty.

This year, I ask you to strengthen the Patriot Plan. Let's exempt our military Guard's pay from state taxes. Let's help local governments deal with the absence of these men and women, many of whom are public servants, until they get back. And my budget will increase the active duty pay for our troops on the front lines of the war on terror.

In a salute to freedom and those who defend it, let's pass a Patriot Plan II this year.

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The freedom the men and women in our armed forces are fighting for is more than a birthright. It is a gift that each generation must, in some way, fight to preserve for the next.

During our nation's history, that has meant sending our sons and daughters off to war - in France and Germany, Korea and Vietnam, Afghanistan and Iraq.

Today, however, we live in a world where the enemies of freedom have no homeland from which to wage that war. So they wage their war against freedom in the form of terror. They wage it against America, the greatest bastion of freedom, and New York, its greatest symbol.

We know what they are capable of, we know that New York will always be a target of their evil, and we know that nothing is more important than preventing them from striking again.

As New Yorkers we are fortunate to have leaders with the courage to confront this threat with force.

On behalf of the people of New York, I want to thank President Bush for his strong support of our security efforts, and commend him for his determination to take this war to the spider holes of Tikrit and away from our city streets.

We have another leader here with us today who has shown defiance against threats of terror. Mayor Bloomberg, New York and America watched with pride as you made Times Square the safest place in the world on New Year's Eve. Congratulations and thank you.

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Shortly after the September 11th attacks, I assembled a team of the top law enforcement officials in America.

That team was the foundation for New York's Office of Public Security (OPS).

Today, New York's Office of Public Security is the best in the nation... And it has to be, because New York embodies the very principles of freedom the terrorists despise.

OPS' first priority was -- and still is -- to enlist the eyes, ears and experience of every law enforcement official in New York State in the fight against terror.

We began by creating 16 Counter Terrorism Zones, utilizing a secure network to keep tens of thousands of law enforcement officials advised of the latest threat information.

We've assigned more troopers than ever to protect New York's borders, its points of entry and transit hubs.

We've provided almost $160 million in equipment and direct funding to local governments.

We've deployed some 150 Weapons of Mass Destruction response units across the State - at least one in every county. These units include everything from individual protective equipment to state-of-the-art chemical, biological and radiological detection equipment.

I'm proud to report that the United States Department of Homeland Security has just designated New York's Cyber Security Office as the national information sharing center. Today, we are providing protection from terror, not just for New York, but for the entire nation.

We've accomplished much, but we live in a new era of danger.

We must confront that danger with firmness and resolve.

As we gather here together under the sober reality of Orange Alert, let us pledge a new era of public security.

Today, I ask you to reinforce the strong steps we've taken with new legislation...

...Less than a week after the September 11th attacks, you and I passed a strong Anti-Terrorism law.

I applaud you for taking such swift action.

This year, I ask you to strengthen it with legislation I proposed jointly with Attorney General Spitzer.

This critical legislation gives prosecutors and police the tools they need to detect, prevent and punish terrorists.

Our proposal provides severe punishment for those who possess or use chemical or biological weapons.

It cracks down hard on money laundering operations that are used to support terrorism.

And it will empower our 75,000 state and local law enforcement officials with the same investigatory powers given to their federal counterparts.

This is the single most important piece of legislation you will consider this year. New York has waited too long. I urge its swift passage.

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And as we fight to protect our freedoms from the threat of terror, we must continue to fight for our most basic freedom of all - the freedom to walk on the streets of New York with confidence, and without fear.

It doesn't matter where in America you live -- if it's in a community where gangs rule the schoolyards, drug dealers own the playgrounds and violent criminals control the streets, you're not truly free.

That was the New York we inherited nine years ago. But it is not the New York we will leave to our children.

Stronger, smarter, tougher laws reduce crime. It's that simple.

Over the past nine years, you and I have passed more than 100 tough new anti-crime laws. Those laws have helped to reduce murders in New York by 56 percent and the overall rate of violent crime by 49 percent - more than any other state in the nation.

We are the safest large state in America.

Let's pledge, over the next five years, to make New York the safest of any state in America.

To achieve this goal we will need both administrative and legislative actions.

First, we will strategically target areas in the State where crime is disproportionately high.

This year we will aggressively target communities within the 15 counties that account for 80 percent of all crime outside of New York City.

Operation IMPACT, or Integrated Municipal Police Anti-Crime Teams, will draw upon all of our State criminal justice resources and consist of over 300 State Police officers.

IMPACT Units will be mobilized at the request of local officials and will work with local police and community leaders to combat crime on an unprecedented scale.

Operation IMPACT will use crime mapping technology to track crime hotspots, bringing the full force of State and local law enforcement to bear on the most crime-plagued areas of our State.

Operation IMPACT will save lives.

Second, through eJusticeNY, we will give police officers instantaneous information on any criminal in New York. If a police officer in Buffalo is holding a criminal wanted in the Bronx, he should have every piece of information he needs to arrest that criminal on the spot.

By the end of this year, 90 percent of New York's police agencies will be linked to eJusticeNY.

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These measures will save lives. But we can save even more if you pass additional common sense crime-fighting pieces of legislation.

Let's pass a law that will allow us to collect DNA from all convicted criminals.

And let's end the statute of limitations for rape, sexual assault, and other serious violent felonies this year.

Let's end parole for all felons.

Let's give police and prosecutors the laws they need to take those who use, sell or possess illegal guns off our streets.

Let's aggressively fight domestic violence by strengthening our laws against those who terrorize their spouses, partners, or children.

We must pass a law to guarantee that violent felons who murder a child in the course of committing a crime spend the rest of their lives in prison.

We must ensure that sexually violent criminals who still pose a threat to society are not released into our communities.

Let's strengthen Megan's Law to provide the public with additional information and impose penalties on sex offenders who fail to comply.

We need a gang sexual assault bill to prosecute these despicable crimes as felonies.

We can prevent needless tragedies on our roadways by passing the Pena-Herrera DWI legislation.

Let's lock up chronic misdemeanor offenders and stop career criminals.

Let's severely punish those who violate the trust placed in them by endangering a child in their care.

And let's agree to strengthen our laws against criminals involved in child pornography.

We must help keep our schools, college campuses and day care facilities safe by imposing tough new penalties for crimes committed on school grounds.

Let's pass a law so those who commit an assault are punished more severely if their victim dies or is seriously injured.

Let's pass my Criminal Procedure Law Reform package to get rid of the absurd technicalities that too often let criminals go free and deny justice to their victims.

And finally, let's launch a new effort to put an end to the needless tragedies we read about all too often. Let's enact new measures to rid our streets of deadly drivers. I will send you a five point plan to do just that.

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More than six decades ago, in his famous Four Freedoms speech, President Franklin Roosevelt spoke about Americans' right to the freedom from fear. While he was speaking about the unfolding events of the war, freedom from fear begins at home with government's obligation to protect its citizens from crime and violence.

No piece of legislation that passes through this chamber is more important than one which saves lives.

These are common sense bills that have broad support, and will save lives.

Pass them and New York will become the safest state in the nation.

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A family feels a greater sense of freedom when it has the security of a good-paying job. That's why building a strong economic climate that creates good jobs is one of our highest priorities.

We've worked hard to do that, and we've done well.

Over the last nine years, we've cut billions of dollars in taxes, kept spending growth below the national average, streamlined government bureaucracy, enacted sweeping debt reform, and eliminated burdensome regulations that stifle economic growth.

However, we all know that the combined impact of September 11th, the national recession and the upheaval in our financial services industry presented our State with tremendous fiscal challenges -- challenges that still must be overcome.

This isn't the first time New York faced tough economic times. The previous national recession - over a decade ago - was four times longer and six times more severe here in New York than in the rest of the nation. We lost more than 500,000 jobs - because the State simply was not prepared to compete.

In less than two weeks, I will address you again, and present my Executive Budget. I will urge you to work with me to put these fiscal challenges behind us once and for all, by restraining spending and budgeting responsibly.

I am pleased that both Senator Bruno and Speaker Silver have said they don't think New Yorkers' taxes should be raised this year. Obviously, I agree.

The tax cuts we've passed have helped to create nearly a half million new jobs and made New York the place to do business again.

Today, the Empire State's economy is fundamentally stronger and holds the promise of a better future because of the steps we've taken. Today, we are ready to compete.

New York City's recovery is beginning to take hold as the recent sharp decline in the City's unemployment rate demonstrates. And over the last year outside of New York City, we had job growth of over 12,000 private sector jobs while the rest of the nation had job losses of over 160,000.

Despite all the challenges, we have reason for optimism because our tax cuts, regulatory reforms and investments in job-creating programs like Empire Zones and high-tech initiatives have laid a solid foundation for our success in the global economy.

...A recent study ranked Rochester as one of the top knowledge-based economic regions in the world...

...many small to medium sized companies in information-intensive industries have been created throughout Long Island...

...the nation's newest chip-fab plant has been built in the Hudson Valley...

...Glens Falls grew at a faster rate this year than all but one city in the nation...

...and, as we announced two weeks ago, GEICO has decided to bring 2,500 jobs to Western New York when they could have gone anywhere in the country...

This gives me confidence that as we come out of recession, we are poised for success.

That's why today I present a challenge. Let's work together and commit to this: by the end of this decade we will have one million more private sector jobs than we do now. It is an ambitious goal. But if we do our part that goal is well within our reach.

As one example of why it is within our reach, I am pleased to announce that BassPro has formally indicated its desire to locate a multi-million dollar flagship center in downtown Buffalo. This new BassPro project will bring in hundreds of jobs and thousands of visitors to Buffalo.

I look forward to working with Senator Bruno, Speaker Silver, the Western New York delegation, County Executive Giambra, Mayor Masiello and Congressman Jack Quinn in taking the necessary steps to make this critical downtown Buffalo economic development project a reality.

In the weeks ahead, let us work together to build additional partnerships to move forward on other key projects...

Let's work with County Executive Maggie Brooks to make the downtown Renaissance Center a reality for Rochester;

Let's work with County Executive Nick Pirro and Mayor Matt Driscoll to bring Destiny to Syracuse;

Let's work with Mayor Jerry Jennings to make sure the nation's greatest state capital gets a new convention center.

And in the North Country, let's modernize the convention center to continue Lake Placid's standing as the number one winter resort in the East.

And let's once again extend our hand of cooperation to the Mayor of the world's greatest city and work with Mike Bloomberg to build on the success of our AirTrain project and develop a new job hub at Jamaica station. At the same time, we'll work with the Mayor to redevelop our valuable waterfronts in each borough... build a true convention center at Javits... transform the West Side, and bring the world to our door by hosting the 2012 Olympics in New York City.

Every community in our State has great potential for economic growth.

To meet that potential, let's build on what we know works.

Empire Zones are one of our greatest economic development tools. They've helped New York State jump from 25th to our current 3rd in the nation in attracting new facilities and investment.

Today, I am announcing new Empire Zone legislation that builds on our success while making the program stronger. This legislation will improve accountability, focus benefits to communities and neighborhoods that need it most, and provide flexibility to target projects with large job creation potential - all while preserving local decision-making authority.

Let's work together and pass this legislation this session.

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While we work to strengthen our Empire Zones, let's also reaffirm our commitment to our State's manufacturers.

Today, I am announcing a five-point plan to do just that.

I am directing the Department of Labor to create new targeted job-training assistance programs to ensure our manufacturers have the most skilled and most productive workforce in the nation.

I am also directing the Empire State Development Corporation to create a new Manufacturing Assistance Program, or MAP, that will coordinate Federal, State and local assistance programs and will link manufacturing companies to the appropriate research and development grant funding.

Three parts of the plan to help manufacturers in New York will require us to pass new laws.

Let's help New York-based companies better compete and encourage others to locate here by phasing-in reforms of the State's tax law to benefit firms that have a majority of their jobs, factories and capital investments in New York.

We must improve our Power for Jobs program to continue providing low-cost power to our State's manufacturers.

And we must build on our past successes and further reform workers' compensation.

In the coming weeks, I will be submitting legislation to make this plan a reality. Let's pass it quickly.

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Two years ago we embarked on an unprecedented endeavor to transform the State's economy through our Centers of Excellence program. Our efforts have launched New York State into the forefront of high technology across the nation. The Empire State High Tech Corridor, stretching from Buffalo to Albany, through the Hudson Valley, into New York City and out to Long Island, is the backbone of our transition to a high tech global economy.

Our investments in the Centers of Excellence program are paying off with new jobs and new attention from companies around the globe. These investments are complemented by investments through the Senate's Gen*NY*sis plan and the Assembly's RESTORE program.

Senator Bruno, Speaker Silver, as we proved with SEMATECH, working together we can out-compete anyone in the world.

States across the country have awoken to our success. A front page article in the Austin American-Statesman said: "Albany's early success has set off alarms in Texas, nowhere more than in Austin. Upstate New York is a direct threat to Austin's standing as a top-tier semiconductor research and manufacturing center."

We've set off the alarms, now it's time to feed the fire.

Today, I'm pleased to announce Phase II of our high-tech strategy that will do just that.

Our Centers of Excellence program has established powerful partnerships between State government, the private sector, and our top flight universities and research institutions. To further enhance these partnerships, this year I will establish a High Tech Council comprised of academic and business leaders. I am pleased to announce that Dr. Harold Varmus, a Nobel Prize winner, former Director of the National Institutes of Health and President and CEO of Memorial Sloan-Kettering Cancer Center has agreed to chair the council.

Second, let's help our promising biotech companies flourish. To grow, New York's biotech industry requires access to capital, and particularly in New York City, Westchester and Long Island, access to facilities.

Our investments in biotech at the University of Rochester have proven enormously successful. This year, my budget will provide funds for critical wet-lab facilities, making institutions in places like Farmingdale, North Shore, Stony Brook, New York City and Rochester eligible to advance their biotechnology research, development and commercialization efforts.

Because biotech is a research-intensive business, many small biotech companies make huge investments and have significant losses that often take many years to recoup. My budget will provide a new tax benefit so that these entrepreneurs can access new capital and create more jobs.

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